Monday, January 25, 2016

Why Amazon Doesn't Violate Antitrust Laws (for the hundredth time)

“The central problem is Amazon’s enormous dominance of the entire book publishing industry,”

I am the publisher; Amazon is the retail outlet. The “publishers,” consisting of thousands of small fry just like me, exist in the most democratizing store front in the history of the world, Amazon’s website. Legally, one could argue that Amazon is a consignment store. “Here is a place to sell your goods,” says Amazon. “Bring them into our store and we will collect the money from the sale and keep a percent for rent and other overhead.”

How Amazon is strikingly different from Standard OIl and AT&T is that Amazon has no ownership interest in even one item out of the millions it sells. It doesn’t own oil lands, leaseholds, drilling platforms, tanker ships, or oil, the commodity itself. Neither does it own communication products put into the stream of commerce for resale. It uses communication products just like it uses carbon fuels, but it doesn’t own those things and has no competitive footprint in the market of such items.

Neither does Amazon have a competitive footprint in the market of books in the sense of ownership interest in the books it sells or the tires it sells or the garden hose it sells or the bracelets it sells–it’s simply a provisioner of a marketplace. You would never accuse a mall of antitrust; you would never accuse a website of antitrust. Offering other people’s products for sale in your mall just doesn’t fit inside the unfair competitive advantage by price-fixing and monopolistic practices the antitrust laws contemplate.

Finally, Amazon’s business practices in no way restrain trade. Every whiner and bitcher out there can go over to Go Daddy, buy a URL for $2.99 and set up a website for $9.99 a month and compete with Amazon 100% restraint free. There is no monopolistic practice that prevents that.